How broken is the Social Security Disability Insurance program?

It is no secret that the Social Security Disability Insurance (SSDI) program is broken.  The real question is how broken is it?  In taking a look at just the headlines over the last three months, you will see that there is no shortage of serious operational issues with the $135 billion and growing entitlement program.  Recently, the Government Accountability Office uncovered $1.3 billion in overpayments and CBS’s 60 Minutes featured the beleaguered SSDI program—identifying parts of the country where 10-15 percent of the population is on the government program.  If you look below the headlines and examine the people who are gaming the system, you will quickly discover that the ongoing fraud and abuse is abundant, sophisticated and even large scale.

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At least 8.9 million Americans now collect disability benefits, more than the population of New York City.  Unfortunately, the Social Security Administration too often fails to weed out legitimate disability claimants from those who are capable of working and are attempting to defraud the system by receiving regular income without having to get a job. As a result, countless Americans are likely scamming the system by improperly collecting taxpayer-funded disability benefits.  An investigation spearheaded by Sen. Tom Coburn (R-Okla.) and the Senate Permanent Subcommittee on Investigations recently uncovered some alarming trends when they reviewed some of the applications filed with the Social Security Administration.  According to a Fox News article about the investigation, “Coburn’s report says a random examination of 300 case files by Congressional staff found more than a quarter of the case files ‘failed to properly address insufficient, contradictory, or incomplete evidence,’ suggesting a high rate of fraud or abuse.” 

The program is rife with various types of waste, fraud, and abuse.  Take for example a Minnesota man who faked dementia to collect nearly $7,000 per month in benefits; or a Missouri politician who improperly received more than $50,000 in disability payments while serving as a state legislator; or a California healthcare professional who invented bogus maladies and provided false information to help scores of patients receive $1.5 million in disability benefits.  Our Generation’s Reform SSDI Now project highlights these and several other examples in a new report titled, 10 Outrageous Examples of Social Security Disability Fraud.

These examples of waste reveal a profound lack of control and oversight over the program.  In order to reform the system, Congress needs to put in place more effective safeguards to ensure that those who receive benefits are only those who truly deserve them.  Reforms like tightening eligibility requirements, conducting periodic continuing disability reviews to reassess the disability status of benefit recipients, and adding greater oversight of administrative law judges who make SSDI decisions would reduce fraud and abuse.  In addition, more incentives need to be created to get those disabled workers who can work in some capacity back on payrolls so they’re not just receiving a government check.  Another great reform that should be enacted is adding an “experience rating” for disability payroll taxes so employers who keep disabled individuals on the job would be rewarded with lower taxes.  Modest reforms and checks on the program could save roughly $50 billion annually by 2030, enough to erase approximately 11 percent of Social Security’s total long-term deficit.

Americans who were alive when SSDI was created in the 1950s will remember that this program had humble beginnings and served as a safety net for those who became permanently disabled after a long work history.  Unfortunately, this program has morphed into something else entirely, and if left unchanged will continue to be gamed every step of the way until the trust fund runs out of money in as little as 18 months.  We must act quickly to reform this program so that fraud and abuse don’t deprive the truly disabled of their benefits.

Slobodien is executive director of Our Generation, a non-profit advocacy group which recently launched the Reform SSDI Now project. 

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